Earlier this year Walpole submitted several responses to the UK government’s consultation on the proposed UK vertical agreements block exemption (also known as Selective Distribution) and we are reassured to see Walpole’s comments and the resulting amendments made to the Order (specifically in relation to the definition of active sales and clarification of the protection for selective distribution systems) which has now come into force.
Selective Distribution is a central pillar of the luxury goods business model and refers to the carefully selected and managed network of partners and distributors through which brands are able to distribute their products to maintain and enhance the luxury retail experience for the customer and, importantly, preserve the aura of luxury.
The right to Selective Distribution is fundamental to the luxury business model, because it gives the sector regulatory protection. The vertical rules set out what is permissible in terms of the distribution and re-sale of goods, which in turn impact upon the owner’s ability to protect the brand. It is also important to have legal certainty so owners can be confident of creating distribution systems which are robust and legally enforceable.
Thanks to the input of members and legal advice from Charles Russell Speechlys, Partner, Head of Competition and Regulation, Paul Stone, this crucial piece of legislation now reflects the best possible outcome for luxury business operating in the UK and provides a secure legal framework around which brands can continue to trade.
One of the key pillars of Walpole’s work to protect the sector is campaigning to make the UK the most attractive destination for high-spending tourists, which contributed £30bn to the UK economy in 2019, but is struggling to recover to pre-pandemic levels. Our latest report What it’s worth: Enabling the return of the £30bn high-end tourism sector which analyses the value of high-end, sets out a framework for recovery and outlines critical asks to Government including reinstating a level playing field for tax-free shopping across Europe, visitor visa reform as well as changes to working visas and extending Sunday trading hours in the West End and Knightsbridge, alongside some promotional recommendations. We will continue to work with our partners the New West End Company and the Association of International Retailers on these crucially important issues for the sector.
Through our media engagement activity we achieved in excess of 20 pieces of coverage in national and industry outlets including Bloomberg, Daily Telegraph, Forbes, Vogue Business and Business of Fashion with the features focused on the value of high-end tourism and the industry calling on the Government to re-introduce tax-free shopping to aid the UK’s post pandemic recovery. The coverage achieved with a combined total audience of 188m and 205K estimated views, based on audience engagement rates.
A key audience for the work on high-end tourism is policy makers with the objective of demonstrating the value of high-end tourism and the role of the luxury sector in supporting inbound tourism across the country. A programme of meetings with stakeholders across Government is now underway with briefings having already taken place with Sir Geoffrey Clifton-Brown MP, John Nichols MP, Douglas Ross MP and Justine Simons OBE, Deputy Mayor for Culture to discuss its findings and tourism recovery in their constituencies amongst other things, with further parliamentary meetings scheduled in the coming months on the tourism report and our other sectoral public affairs priorities.
The recent news that that UAE and other GCC countries including Saudi Arabia, Bahrain, Oman, Kuwait and Qatar have been added to the UK’s list of countries that are eligible for the its new Electronic Travel Authorisation (ETA) system, meaning nationals from these countries will no longer require visas to visit the UK starting from 2023 in incredibly encouraging. Achieving greater ease of travel to the UK for visitors from the GCC was a key ask in the report and we are delighted with this development.
Further to the news around GCC visitor visas, the Department for International Trade (DIT) published details of its approach to the forthcoming Future Trade Agreement (FTA) negotiations with the GCC. The new FTA, which will incorporate all six countries in the block, seeks to simplify trade with the UK, providing greater market access to each nation and lowering intraregional trade barriers. The new FTA, negotiations for which are due to start in this summer and will run into 2023, will cover tariff and non-tariff barriers to trade.
The markets across the GCC represent an important opportunity to grow British luxury’s exports and a reduction in, for example, the high tariff rates on clothing and ceramics (both 15%) along with increased transparency, simplified regulation and labelling requirements will be important steps towards further expansion for British luxury brands looking to develop their business in the GCC.
As part of our work with the Department for International Trade’s Trade Advisory Group for Consumer Goods and Luxury Steering Committee, we want to hear from members in terms of what they would like to see from the new FTA and any challenges and opportunities around doing business in the GCC. Click here to feedback.
With international business travel now resuming at pace, we were delighted to resurrect our annual consumer insight lunches firstly with Sean Blakely, chairman of the British Chamber of Commerce in South Korea to discuss the latest developments and opportunities for British luxury brands in the market. And more recently we were joined by Anson Bailey who is a partner at KMPG Asia, leading the consumer, retail and luxury teams based out of Hong Kong who covered the political and business landscape, customer insight, the latest developments of the zero covid policy and local lockdowns as well as the trends and outlook for luxury.
Both provided interesting and practical insights into their respective markets and any members who would like to be connected with Sean or Anson to find out more about expanding into South Korea or China should contact [email protected]. If you would like to register your interest in attending these lunches in future, please contact [email protected].
The luxury industry is a significant source of employment in the UK with around 160,000 people working in the sector in long-term, sustainable jobs across the country. However, there are challenges around securing a pipeline of new workers throughout all sectors of luxury, particularly in skilled making roles. To find out more about the skills shortages and recruitment challenges facing members, Walpole convened a breakfast of member CEOs, founders and talent specialists to discuss apprenticeships, skills preservation and attracting the next generation into the luxury sector. This meeting will be the jumping off point for Walpole’s 2023 campaign to address skills shortages and we would love to hear from members who have particularly effective training and apprenticeship schemes already in place as well as those who are experiencing difficulties in this area. Get in touch here.
Picture credit: Adobe Stock, alice_photo
